Czech companies face jobs skills mismatch as shortages become acute

Job and skills shortages are a topic on the tongues of most Czech
businessmen and women at the moment. The figures speak for themselves:
almost as many job seekers as vacancies. But there is a clear mismatch
between the skills offered by the jobless and the demands of the jobs on
offer.

Illustrative photo: CTK
Hays is an international recruitment company that’s been operating in the
Czech Republic for 20 years. And it specialises in some of the specialist
areas where the job shortages are at the most acute in the Czech Republic
right now. Ladislav Kučera is managing director of the Czech branch. And
he explained first of all how unique the situation on the Czech jobs market
is right now.

ʺAt this moment we have something above 215,000-220,000 open jobs in the
Czech Republic. For the record, we have never had that since the Velvet
Revolution, since the communist time when everyone had jobs. So it’s a
very unique situation. It’s a candidate driven market at this moment. So
we really switched after the recession and the switch was very fast. That
was also very unique because from 2014-2017 we saw a rise of around 150,000
plus in open jobs within three years. That is really, really fast. At this
moment we are in the situation where there is an active hunt from the
employer for employees and it’s no longer a matching system - job opening
and a suitable candidate – but it’s more about candidate attraction.ʺ

In that case, employers have to go out of their way to find the right
people… or maybe just to find any people because they can’t get the
right people any more. How much pressure is on them to boost wages and
boost all the other incentives and benefits around?

ʺIn some of the situations the candidates can just use the market to price
themselves in the current position.ʺ

ʺYou asked it in the first question and I did not answer. Actually since
2017 – in 2016 the pay rise was slow – it [wage rises] have been very
significant throughout the segments. There was actually no segment which
actually stagnated a lot. Most of the wage rises that we have seen are
around 10 percent and above. When we are talking about personnel or
employees who are employed already and are changing employers or are in the
way of thinking about a change, there we might even be seeing more than 15
to 20 percent wage rises from the current job to the potential future one.
So that’s really a big change to the market as we know it and also to the
candidates’ internal recognition itself. Candidates start to be a little
bit more flexible and they are not so conservative as they used to be.
Before it used to be, I have a job I have security and this is a good place
and there has to be a very interesting offer before I will consider [a
move]. At this moment, candidates or somebody who would be willing and open
to see themselves on the workplace or the work market are a little bit more
bolder and are open to offer themselves for new opportunities even without
knowing what that opportunity will be.ʺ

That boldness is an expression of the whole market situation where
they are
not even taking a risk and can look around test the market, see what’s
happening, without any real fear of the consequences…

Ladislav Kučera, photo: archive of Hays
ʺYes, exactly as you said. In some cases that could be market testing. It
could be asking what is the appreciation in terms of the salary, benefits
and everything on the market of the jobs that I am having at the moment and
how am I graded with my current employer. In some of the situations the
candidates can just use the market to price themselves in the current
position. It is not happening really a lot but in some cases it is. More
often it is: I have been in a job, the market situation is good and there
are offers. So let’s try where I can move myself.’ʺ

Let’s look at it from the employers’ point of view. In many
sectors of
the Czech economy there are shortages. Okay, there are unemployed people
but they often don’t have the skills to match the jobs, which is one of
the major problems. So how much is it a problem now and how much will they
have to face it in future years to get new people or just to hold onto the
people they have?

ʺI would say it’s a big challenge but we have to divide it into two
parts. If we take the short term, it’s a very big problem. In the long
run, it might be a challenge for them to be innovative and bring in
automation in some processes where manpower is not needed or there are no
more people working in those positions that are at the lower end of the pay
scale. So, a machine-robot would be taking the place of a person and the
human capital will actually increase a little bit.

ʺBut in the short term, it’s a really big problem. Our economy is pretty
much dependent and we are an export economy. If the employer in the Czech
Republic is in a chain of suppliers and cannot supply a part of something
that is being assembled at the final destination, that might be a big
challenge to employers or investors here. And they have to be really
flexible in the way of attracting the right talent because there is a
shortage.

ʺSo at this moment we are not actually that open to talent.ʺ

ʺAnd our political situation is not really pro-flexible if I am able to
say that. Now with the current hysteria about the word immigration, which
is nothing bad about it but our politicians just used it for their
political campaigns and twisted it out into something that is totally
nonsense. So at this moment we are not actually that open to talent and I
am not saying unskilled labour but talent in technologies, that could be an
IT engineers, a software developer, anybody from a quality check to process
and process engineers coming into the country, which is fairly
industrialised, and we don’t have the talent. Simply and literally, if we
go with economic growth and businesses growing as they have so far, we
don’t have enough people actually to service those jobs in the Czech
Republic. And also, on the other hand, we don’t have enough engineering
degrees and skilled and technically educated candidates that would be able
to fill all these open jobs.ʺ

Where do you see the problems as being the most serious at the moment
and
going forward will they continue to be the problem areas?

Illustrative photo: Ordercrazy, CC0 1.0
ʺFrom our perspective, because we are dealing with specialist recruitment,
it would be technologists. It [the problem] has been here for a while but
the need is now really accelerating. Even is saying that and I can only
confirm it. It is also IT technologists, not that I am talking about really
big data security, but development as a whole. Anything that has to do with
coding, anything that has to do with programming, there’s a huge shortage
actually in the majority of the languages that are being coded. So that’s
the biggest shortage. And with the way of life that we are used to now, and
it’s changing everywhere, that if you look around yourself most of the
things that we interact with has a microchip in it and if they don’t have
it they will have it tomorrow. There needs to be some kind of code and at a
service level taken out from those microchips as they try to have some kind
of Internet of Things (IOT) applications. They try to make those fridges,
toasters, or something that you would operate from a very dumb thing to
something smarter things that can be self- operated and can predict. But
that has to be developed somewhere, the software has to be written
somewhere, it has to be serviced somewhere. And I see the gap increasing
more and more. The schooling and educational system is not changing in a
way as to cope with the fast change in the world of work that we are
experiencing.ʺ

You mentioned automation, how fast or adequately is that coming into
some
sectors? I read a while back that there was a problem because there
weren’t the developers to develop the robots to replace the people in
some of these jobs.

ʺIn 20 years there is not really going to be an employer-employee
relationship.ʺ

ʺYes, it’s connected. But I think that our situation in the Czech
Republic could speed it up. On the contrary, it could have a positive
effect in a way of having automation coming in a bit faster than was
originally planned. Also, what we have to think about is that the majority
of investments of the employers in the Czech Republic aren’t based on
Czech capital. They have a mother company and it has been established from
abroad. We have to understand that we are not really in control here
locally when it is going to happen and it has to make financial and
economic sense. We can see it starting, slowly but surely, in the
environments where we would not think it would happen in the next five
years. At this moment, if the investor is here to stay and the investment
has been big enough or profitable, then I would say the change will be in
the next two, three, or five years. We will really have to see that change
to automation. The talent mismatch, even though there might be a slight
rise in unemployment, is something we will be battling as well as Western
Europe.ʺ

In what way do you think the overall relationship between employers
and
employees is likely to change in the next three, five, 10 years? It’s
likely to be a lot more flexible system and you are not maybe going to have
one employer?

Illustrative photo: archive of Czech Government
ʺWe as Hays are in 33 countries and have run questionnaires or studies
where we have asked business leaders various things about how they see the
future of their businesses or the business environment in 20 plus years.
One of the most common things that came out in the relation between
employer and employees is that the organisations actually have to prepare
themselves to be an organisation of the future, meaning that would actually
have to be a lot more flexible in the way they actually employ or interact
with future know-how holders. Ina way, what we predict, I could be wrong,
is that in 20 years there is not really going to be an employer-employee
relationship but more a sort of freelancer working on a project for a
certain brand or a certain company that would actually have a project based
business.

ʺI can see it a lot faster in the western part of the world because in the
Czech Republic we are very rigid in the ways how we are used to do stuff.
We are not really that flexible in moving and following the jobs. We
don’t really do that, we are stuck in our own ground and also in the way
of having jobs for an unlimited period. This [mentality] is also something
that exists although everything can end sometime. We have to see for the
next generations coming out of the schools and see the work-life balance
become more of a theme than at this moment. It will come out that
freelancing and being your own boss in the way of supporting and servicing
your own projects with your know-how and learning with it will be much more
in place. But I should add, in order to do that we will have to have very
flexible legislation which at this moment we don’t have. And it’s
something that might slow us down in the years to come because if you
don’t have the ground prepared you can’t really evolve as fast as the
market.ʺ